D’Aguanno, Lucio (2018) Monetary policy and wealth effects with international income transfers. Journal of Macroeconomics, 57 . pp. 210-230. doi:10.1016/j.jmacro.2018.06.001

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Abstract

I study how a system of international transfers based on dividend income affects monetary policy in a two-country model with incomplete asset markets. I show that macroeconomic shocks alter international transfer payments and determine cross-border wealth effects on labour supply, output and consumption. The direction of these effects depends on the nature of the underlying disturbance: technology and wage markup shocks cause wealth effects that stabilise consumption relative to output, whereas monetary and price markup shocks cause wealth effects that destabilise it. Numerical work shows that this affects the balance of monetary policy between inflation and output stabilisation.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Monetary policy, International finance, Transfer pricing
Journal or Publication Title:	Journal of Macroeconomics
Publisher:	Elsevier
ISSN:	0164-0704
Official Date:	September 2018
Dates:	Date Event September 2018 Published 15 June 2018 Available 5 June 2018 Accepted
Volume:	57
Page Range:	pp. 210-230
DOI:	10.1016/j.jmacro.2018.06.001
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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